Salil Satish Parekh, who lost out to Vishal Sikka the last time Infosys was hunting for a new chief executive officer in 2014, has now been tasked with leading the company a little over four months after Sikka’s acrimonious exit from Infosys, with chairman Nandan Nilekani and the board of India’s second largest outsourcing firm putting their faith on a technology industry veteran of nearly three decades.
The appointment of Parekh, who was a top executive at global IT services giant Capgemini prior to his latest assignment, marks the second successive time that Infosys has chosen a rank outsider to helm the company, after being run by its founders for the better part of its first three decades of existence.
Yet, unlike with Sikka, Infosys has also somehow played it safe by anointing Parekh, who unlike Sikka, comes armed with plenty of experience of negotiating multi-million dollar outsourcing deals, which are staple for Infosys and its peers such as TCS, Wipro and US-based Cognizant Technology Solutions. Sikka, on the other hand, came into Infosys in 2014 with the reputation of a strong products and technology leader, but with virtually no experience in the outsourcing industry.
Parekh’s appointment drew immediate praise from Infosys founder NR Narayana Murthy, who had a bitter and public fallout with the previous board of Infosys and Sikka during the months preceding his ouster.
“I am happy that Infosys has appointed Mr Salil Parekh as the CEO. My best wishes to him,” said Murthy in a statement to Mint.
Unlike Sikka, Parekh is not flashy nor gregarious and is considered to be more amenable to the founders of the company, according to two executives. Parekh being a more understated executive is reflected by the fact that there is not much publicly available about the 53-year old executive, who is an IIT-Bombay graduate and Cornell university alumnus.
Parekh also comes in with the reputation of being a leader adept at executing well in the world of IT services — something that co-founder and current chairman Nandan Nilekani prizes immensely and has alluded to in recent press conferences and media statements.
“We are delighted to have Salil joining as the CEO & MD of Infosys. He has nearly three decades of global experience in the IT services industry. He has a strong track record of executing business turnarounds and managing very successful acquisitions. The Board believes that he is the right person to lead Infosys at this transformative time in our industry. The Board is also grateful to Pravin for his leadership during this period of transition,” said Nilekani on Saturday.
Parekh, who held the designation of CEO of Capgemini’s UK, Asia and financial services businesses, will be the sixth CEO of Infosys, which was started in 1981 by seven middle-class engineers, including founder NR Narayana Murthy and Nilekani. Parekh, who is currently based out of Mumbai, will relocate to Bengaluru, which houses Infosys’s headquarters.
Interestingly on Saturday, Capgemini put out a separate press release, saying that Parekh “decided to leave the Group in the context of the recent managerial evolutions communicated in October”. Capgemini appointed two chief operating officers in October.
Mint could not immediately verify whether Parekh left Capgemini because he was not elevated to the role of COO.
Capgemini reported Euro 12.5 billion ($14.9 billion) in revenue for the last year as against Infosys ending with $10.2 billion in revenue for the year ended March 2017. However, Capgemini’s market cap of 16.35 billion euros ($19.45 billion) is less than Infosys’s market cap of $33.6 billion.
Parekh, joined Capgemini in 2000 after the company bought the consulting arm of Ernst and Young.
Parekh will start his new job at Infosys in January, which indicates that he will have a three-month period to get familiar with the nearly 200,000-strong company.
For now, Infosys has already scaled back its revenue outlook to at-best 6.5% in constant currency terms, as against at-best 8.5% growth outlined at the start of the financial year. This means Infosys has tempered street expectations and analysts believe that the company will be scrutinised on its performance in next year.
“You got to give credit to Nandan for he has already taken pressure off from the new CEO by cutting back growth,” said a Mumbai-based analyst at a foreign brokerage, on the condition of anonymity.
“After a comprehensive global search effort, we are pleased to appoint Salil as the CEO & MD. He was the top choice from a pool of highly qualified candidates,” said Kiran Mazumdar-Shaw, head of nomination and remuneration committee. “With his strong track record and extensive experience, we believe, we have the right person to lead Infosys.”
Experts tracking Infosys lauded Parekh’s appointment, but cautioned that the new CEO would need to be given enough freedom to effect a meaningful transition at Infosys, without interference from the founders.
“So Infosys appears to have played it safe as the company a bad experience of earlier appointing an American CEO based out of US,” said Shriram Subramanian, founder and managing director of proxy firm InGovern Research. “Salil has grown along with the Indian IT services industry, and has experience working out of India, and is going to be based out of Bengaluru.”
“One hopes that Promoters give the new MD his own space and do not interfere,” added Subramanian.
In a major setback to thousands of students who pursued engineering studies through correspondence courses offered by deemed universities in the last 16 years, the Supreme Court declared on Friday that the degrees were invalid, putting them at risk of losing jobs obtained on the basis of the certificates.
A bench of Justices A K Goel and U U Lalit noted that the University Grants Commission (UGC) and the All India Council for Technical Education (AICTE) did not approve distance learning programmes in engineering studies and the approval granted by the Distance Education Council (DEC) for such courses was illegal.
The SC decision exposes the extent to which the regulatory system was compromised as the courses were being run for more than a decade and a half without attracting serious scrutiny.
The apex court directed the Centre to create an oversight mechanism to regulate deemed universities, saying that UGC completely failed to curb the commercialisation of education. It asked the go vernment to review the deemed university status of various institutions.
The court adjudicated a bunch of petitions on the validity of correspondence courses of four deemed universities -JRN Rajasthan Vidyapeeth, Institute of Advanced Studies in Education in Rajasthan, Allahabad Agricultural Institute and Vinayaka Mission’s Research Foundation in Tamil Nadu -which have been providing engineering education through correspondence since 2001 despite AICTE disapproval.
The apex court restrained all deemed universities from offering correspondence courses without the approval of the AICTE and directed a CBI probe against officials who permitted the universities to run the programmes from 2001. The court passed the or der after UGC’s coun sel and ASG Maninder Singh and AICTE advocate Anil Soni informed the court that distance learning courses in engineering were not permitted.
“AICTE shall devise the modalities to conduct an appropriate test. Students (from 2001-05 batches) be given not more than two chances to clear the test and if they do not successfully clear the test within the stipulated time, their degrees shall stand can celled,” the bench said suspending their degrees.
“In respect of students admitted after the academic sessions of 2001-2005, the degrees in engineering awarded by the concerned deemed to be universities through distance education mode shall stand recalled and be treated as cancelled. Any benefit which a candidate has secured as a result of such degrees in engineering in the nature of promotion or advancement in career shall also stand recalled.However, if any monetary benefit was derived by such candidates, that will not be recovered by the concerned departments or employers,” it said and directed the universities to refund the money to students.
“We restrain all deemed to be universities to carry on any courses in distance education mode from the academic session 2018-19 unless it is permissible to conduct such courses in distance education mode and specific permissions are granted by the concerned statutory regulatory authorities,” the bench said.